After the high publicity received during what was termed “Global Bitcoin Conference” in Bangalore on 15th December 2013, it was natural that there should be some cooling down of passions. This happened with the twin actions of RBI releasing an advisory and the actions of the ED. Presently the industry has entered into a phase of consolidation.
The current operators seem to have come together to form a lose association and conducted a press conference in Mumbai on the 4th of January 2014. The press conference was aimed at communicating with the RBI the industry views on the Bitcoin concept. It has done its bit and it is now time to await the reaction of RBI.
During the conference it appears that the group has indicated that India is estimated to constitute about 1% of the global market of Bitcoins and the trade is valued at the order of Rs 600 crores and constitutes about 50000 users.
If this estimates are true then there is a definite case for the regulators to show some concern on regulating the industry. Also if in due course other crypto currencies gain ground, the industry may easily become significant enough to regulated.
Regulation per-se is not detrimental to the industry since it will bring order. Whenever a new business idea comes up, in the early adopters there will always be certain irresponsible elements who may create an undesirable public and regulatory perception about the industry. Bitcoin community in India has also been passing through this phase. It is necessary that actions need to be taken to discipline the members and maintain a sense of respectability to the group.
The conference in Bangalore did bring out this need. There was enthusiasm and excitement amongst the young crowd about the concept. But the conference remained largely as a promotional event and failed to initiate an evaluation of the possible future developments. As a speaker I did raise the concerns but it was too late in the day and too little to lead to introspection. As the crowd disbursed in great spirits, they received a rap on the knuckles through the developments of the last fortnight. This appears to have now driven home a sense of responsibility in the current industry players since most of them are otherwise techies with successful professional careers behind them and who would like to maintain their respectability in the society.
Naavi.org welcomes the current move of the industry players to come together and act responsibly with guidance from the legal fraternity.
I presume that M/S Nishit Desai associates have been retained by the community to represent them in the legal cases that are presently unfolding against some of the members. We can now wait for further developments to play out. Will the ED back out? Or will it take its investigations to the logical end? is the next question to be answered. If the investigations continue there will be an inevitable legal battle which will keep the industry concerned for some time.
It is likely that the issue will now go into hibernation and the activities in Bitcoins will be subdued for some time. In the meantime there will be further developments in the global front too which will be keenly watched by the regulators. The regulators would also be making their own internal evaluations on the impact of these developments.
The regulator cannot look at this issue as an issue involving only the Bitcoin community. Whatever decision that is taken now will affect the Crypto Currency Industry in general and in due course at least two or three other crypto currencies are likely to emerge as significant players and the net impact of all these crypto currencies need to be taken into account by the regulator before they arrive at their decision on Bitcoin.
In the next two months we can expect some more action in this front which will define the future of Bitcoins in India. How the industry reacts to further developments will determine the maturity of the industry players and their commitment to shape the future.
Will Bitcoins just pass out as a fad? or will it develop roots and grow?… Let’s keep our fingers crossed and watch.
P.S: Naavi is not a member of Bitcoin Alliance as has been wrongly reported by The Hindu in one of the recent reports.